Russia’s Economy Ministry has lowered its forecast for oil prices this year in an update for its baseline scenario, reflecting the latest trends on global oil markets.
Per the new scenario, Brent crude will average $68 per barrel, down from $81.7 per barrel in the September 2024 scenario, Interfax reported today. The ministry also updated its oil price forecast for the next two years, expecting Brent crude at an average of $72 per barrel for 2026, down from $77, to remain at $72 in 2027 as well, down from an earlier projection of $74.5 per barrel.
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For Urals, Russia’s flagship export blend, the Economy Ministry expects an average price of $56 per barrel this year. This price would be below the G7 price cap aimed at curbing Russia’s oil revenues, meaning exporters could use Western insurance and tankers to ship the oil—unless the G7 decides to lower the cap, as some in the group have suggested previously.
“You can see how forecasters oscillate between total pessimism and total optimism,” a spokesperson for the ministry told Interfax, referring to the 2025 oil price forecast. “We believe this is a fairly conservative price forecast and with regard to the budget and to the sovereign wealth fund, we also believe it is a normal and realistic forecast.”
Earlier this year, oil prices dropped 24% below the level stipulated in the country’s federal budget for the year. The decline came as a result of Trump’s tariff offensive, a persistent perception of an oversupplied market, and a stronger ruble. The prospect of peace in the Ukraine, fueled by the Trump administration also contributed to the oil price route from the past month.
The situation prompted a warning from the governor of the central bank, who said the oil price rout could have an adverse effect on the Russian economy. “If the escalation of the tariff wars continues, this usually leads to a decline in global trade and the global economy and, possibly, demand for our energy resources. Therefore, there are risks here,” Elvira Nabiulina said.
By Irina Slav for Oilprice.com
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